In  Goldacre (Offices) Limited v Nortel Networks UK Limited (in administration) [2009] the High Court ruled that if the administrators cause the insolvent company to use a property for the benefit of creditors, the rent must be paid as an expense of the administration, even if only part of the property is used.

However, where a landlord wishes to take action against a tenant in administration such as bringing forfeiture proceedings the court must still follow the approach taken by the Court of Appeal in Sunberry Properties Ltd v Innovate Logistics Ltd [2009] and balance the interests of the landlord and the creditors of the company in administration.

The High Court decision is helpful to landlords as it confirms that rent for property will rank ahead of sums due to preferential and other unsecured creditors if the property continues to be used for the administration.

It should be noted that, the administrator is not obliged to pay the rent immediately upon it falling due if it does not have sufficient funds to do so. Prospective administrators must make suitable arrangements to meet the company's liabilities in relation to leasehold property when considering the strategy for the administration of an insolvent company.